Rural hospitals get billions in extra Medicare funds

Federal investigators say a law allowing rural hospitals to bill rehabilitation services for seniors at higher rates than nursing homes and other facilities has led to billions of dollars in extra Medicare spending.

The report out Monday from the inspector general of the U.S. Department of Health and Human Services focused on the remote hospitals' care for so-called "swing-bed" patients. These patients remain hospitalized after they normally would be released to a skilled-nursing facility. Such care cost the government an additional $4.1 billion over six years.

National Rural Health Association CEO Alan Morgan doesn't dispute Medicare could save money by modifying the system. But Morgan says dozens of rural hospitals have closed in the past five years and nearly 300 others are on the brink. The policies in place, he says, are keeping those closures from accelerating further.